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Viktor Mayer-Schönberger: "Data-rich markets will change our society"

Data is replacing money as the driver of market behavior. Big finance and big companies will be replaced by small groups and individual actors who make markets instead of making things. That is what Viktor Mayer-Schönberger concluded in the 2nd Vrienden van Cobbenhagen Lecture entitled Towards a Digital Society on Friday January 26, 2018.

Mayer-Schönberger is professor of Internet Governance and Regulation at Oxford University. His research focuses on the role of information in a networked economy. He is a widely recognized authority on big data and on the advisory boards of corporations and organizations around the world, including Microsoft and the World Economic Forum.

Mayer-Schönberger: "I look at the fundamental mechanisms of efficient coordination in our society: the market and the firm, and sketch their likely trajectory in the digital, data-driven age. As markets reinvent themselves with rich data, they regain the edge over the firm. But money and capital lose their dominant roles. And if we don’t act swiftly to put appropriate policies in place, we may kill innovation as well as competition, and undermine the market just as it is set to rebound. Much is at stake. I explain not only how, but also offer suggestions to move forward towards data capitalism and a digital dividend that benefits all."

Data Capitalism

Mayer-Schönberger is the author of over a hundred articles and eleven books on the economics and governance of information, of whichh the most recent is Reinventing Capitalism in the Age of Big Data (translated in Dutch: De Data-Economie, 2018 Maven Publishing). This book claims to provide the indispensable roadmap for securing a better future. In modern history, the story of capitalism has been a story of firms and financiers. That's all going to change thanks to the Big Data revolution. As Mayer-Schönberger shows, data is replacing money as the driver of market behavior. Big finance and big companies will be replaced by small groups and individual actors who make markets instead of making things: think Uber instead of Ford, or Airbnb instead of Hyatt. This is the dawn of the era of data capitalism. Will it be an age of prosperity or of calamity?

Before he has published the international bestseller Big Data (co-authored with Kenneth Cukier, translated into more than 20 languages), Learning with Big Data (also co-authored with Cukier) and the awards-winning Delete: The Virtue of Forgetting in the Digital Age (with Princeton University Press, available in multiple languages).

Book review 'De Data-Economie'

Another entry in the rapidly growing literature about how big data will soon transform capitalism as we know it. Expect “a fundamental reorganization of our economy, one that will be arguably as momentous as the Industrial Revolution,” write Mayer-Schönberger and Ramge. In this thoughtful, provocative account of the coming impact of big data on human transactions, the authors note that economic activity has long been coordinated by markets and firms, with price serving as a convenient way to distill information about the value of goods and services. In the process, valuable details were lost. Now, as we enter a new age of data capitalism, digital innovations are allowing “massive amounts of data… [to] flow quickly, easily, and cheaply between transaction partners,” helping them make better decisions. At the same time, we have the methods and tools to work with that data.

This emerging economy has already given us such enterprises as BlaBlaCar, which helps millions of people share car rides each month. “From internet travel site Kayak to online investment company SigFig, to digital labor platform Upwork,” write the authors, “more and more markets that use data to help participants find better matches are gaining traction and attention.”

Such improvements in transactions and efficiency will soon reshape markets of all kinds and allow us to address climate change and other complex issues. With price no longer the chief focus (machines will negotiate with sellers), there will be less need for money and banks (many will be gone by the late 2020s), and firms will have to reinvent the way they do business.

The authors cover the inevitable upending of the labor market and the possible need for constant worker retraining or a universal basic income. An unnerving yet plausible portrait of a future in which “finance capitalism will be as old-fashioned as Flower Power.” (Kirkus Reviews)